Total Leadership – Ethical Behaviour Is Essential

How did we ever get from George Washington’s “I cannot tell a lie” to “I refuse to testify”?the Fifth Amendment invocation that so many executives have hidden behind recently? From the criminal behavior of the Enrons and WorldComs to the political campaign ads filled with lies, half-truths and distortions to puffed-up rŽsumŽs and cheating on income taxes, the pervasiveness of this integrity deficit is astounding. In a USA Today survey, 82 percent of CEOs admitted lying about their golf scores. Some might say that is insignificant in the overall scheme of things, but it is a small window into the character of those CEOs. The probability that golf cheaters are also business cheaters is high. Little by little we lower our standards so that what was unthinkable yesterday becomes acceptable today and rewarded tomorrow.

A sense of fairness should make us cautious, lest we paint everyone with one brush. Many companies, executives, politicians and others are exemplars of integrity. Nevertheless, everyone can benefit by brushing up on ethics. Begin by looking in the mirror. Where would you place yourself on the integrity scale? Honestly?

Ethical Leadership

Good leaders have ethics, character and integrity. Ethical leaders are self-confident, not self-centered. People will deliver an extraordinary performance for a leader they trust. You’ve seen it in a winning athletic team, a successful project or a profitable business venture, where teamwork built on trust and mutual respect accomplishes the common goals.

Consider, then, the consequences for business of the current negative perceptions. In a CBS poll taken in fall 2002, less than one-third of the respondents said they believe most CEOs are honest, 79 percent said questionable business practices are widespread, and more than two-thirds said they think CEOs are commonly compensated illegally. Employee distrust becomes the business issue. Unremedied, it will threaten our future competitiveness.

Skeptics may say that in the “real world” we are led by the manipulators. Undeniably, some leaders will fit that description. In the short run they may be successful, but inevitably most will suffer the consequences of their actions. Ask yourself whether this is what you aspire to. Is this how you want to lead?and be led?

To operate an ethical organization, you have to create an environment for your people that allows them to operate in an ethical manner.

Set the tone. The character of the leader casts a long shadow over his organization and can determine the character of the organization itself. What you do, how you do it and what you say will set the tone for your employees and create the boundaries of acceptable behavior. The values you profess must be aligned with the behaviors you demonstrate.

Establish and enforce policies. Set policies appropriate for your organization. Communicate them regularly, and adhere to the corporate policies already in place. Show zero tolerance for ethical violations. Without a demonstration of real consequence, policies are useless. If we shrug and accept unethical behavior as OK “just this once,” then it becomes more common.

Educate and recruit. Consider using a formal education program to enhance the understanding of and commitment to integrity. Find universities that have incorporated business ethics in all courses, and make them a prime recruiting source.

Separate duties. This is a classic organizational concept that needs to be reinvigorated. For example, are your financial systems maintained outside the finance department?

Reward ethical conduct. The reward system is a large window into the values of an organization. If you reward a behavior, people will do it.

Eliminate undiscussables. Perhaps the most important thing you can do is instill the belief that it is OK for your employees to question what happens above them. Doing away with untouchables shines a cleansing light of openness and promotes trust.

Personal Ethics

What can one person do to alter the ethical landscape? I believe every person can make a difference. CIOs have a great opportunity to demonstrate moral leadership through their personal behavior and through the environment they create for their staffs.

Here are a few of the everyday situations that have the potential to pose ethical dilemmas for CIOs:

• Maintaining independence in vendor relationships against the pressures of personal bias, demands for reciprocity, and offers of gifts, giveaways or stock ownership.
• Maintaining the integrity of company databases in the face of requests to use the data inappropriately.
• Ensuring that the necessary security and controls are incorporated and maintained in application systems despite pressures to reduce costs.
• Providing truthful information on the status of projects, budgets and profits even when there are problems.
• Standing firm on a decision despite its unpopularity.
• Reporting suspected unethical behavior of others despite personal discomfort.

The first item of importance is to recognize that you have an ethical dilemma. First, ask yourself whether this is the start of a slippery slope to ruin. Once a person crosses the line ethically?no matter how innocuous (remember the golf scores)?it becomes easier to slide on the bigger issues. Second, would you like to see this decision or action on the front page of The Wall Street Journal tomorrow morning? If not, then you may want to rethink your decision.

Temptations come in many forms. There is the inner voice that whispers, “Everyone does it,” “Just this once won’t hurt” or “No one will ever know.” There is also the person who tells you, “Forget we had this conversation.” Tune out those inner voices. Think of the values you espouse and match your behavior to these values.

What should you do when you observe an illegal or unethical act? Do you ignore it, confront the culprit or report it? Taking an action in these instances is crossing the Rubicon. There is no going back. There can be some negative consequences to whistle-blowing. Maybe you lose a friend, a bonus or even a job. But doing what is right lets you sleep at night and not have to constantly look over your shoulder fearing discovery.

Ethical behavior is tough. It takes courage to stand for the truth. I think of Coleen Rowley, the Minneapolis FBI agent whose whistle-blowing letter called out some FBI shortcomings that may have led to the 9/11 tragedy. A colleague of hers said, “She always does what is right, even when no one is watching.” Think of that when you need a little courage. Let me leave you with words of wisdom from Thomas Jefferson: “In matters of style, swim with the current; in matters of principle, stand like a rock.”